Few Closing Costs a Seller May Have to Cover

When you decide to sell your house, you are expected to pay significant closing costs that include real estate agent commissions, transfer fees, and taxes. Once you accept an offer on the house, you may think of receiving a significant profit amount. But, a portion of that profit will go towards paying the closing costs that you as a seller will have to pay. The typical amount involved in the closing costs ranges roughly between 6 to 10% of the sale price.

On a brighter note, if you have very less home equity, these closing costs will be deducted from the final selling price of the home. You will be spending some money, but since that money will not hit your bank account, it will hurt a little less to lose some.

You and the buyer can expect to receive a closing disclosure 3 days before the actual closing. This has all the details of the sale with actual numbers. This way, you will know what the cost of each and everything is. You also have the chance to re-verify everything and correct any errors if found.

“Can I sell my house for cash in order to avoid closing costs?” if you are wondering the same, keep reading till the end to find out.

Here are a few of the common closing costs that the seller may have to cover

Title Insurance

One of the common closing costs that the seller is expected to pay when listing their houses for sale in Corpus Christi is title insurance. Before the sale, a search, known as the title search is conducted for verifying the ownership. In some states, you also need a real estate attorney for reviewing the title. This title policy is designed to protect the lender and the new home buyer if they choose to buy a policy of their own against any unexpected ownership claims that can arise. Although not a common scene, ownership claims can trigger legal disputes and it comes with extensive lawyer fees. You may not be able to lower the title insurance cost, but the price of it can protect you against any troubles that may arise in the future.

Real Estate Agent Commission

Let’s say you intend to use the expertise of a real estate agent if you want to sell your house fast for cash, you need to pay them a certain amount for their help. This amount usually varies from one agent to another, so you need to make sure you calculate the numbers before you go ahead. A common commission amount charged by the real estate agent for their services is 7% of the total selling price of your property. But, it is wise to hire flat-fee agents. This way, you will know the exact money you will have to pay to your agent upon closing.

Seller concessions

For making a deal go through or in a buyer’s market, you may agree to pay a certain sum in the closing costs. This cost is known as the seller’s concession. Other terms used for seller concession are seller contribution or seller credit. One of the most common seller concession costs is to cover up the expenses of the necessary repairs incurred during the home inspection.

If your buyer does not pay in cash, the total amount for the seller’s concession is limited to the type of home loan they will be using. For conventional loans on single-family houses that are the primary residences, seller concessions range from 3 to 9% based on the size of the down payment of the buyer. Loans that are backed by government agencies have their set limits on seller concessions.

Property Taxes

In most states, homeowners pay the taxes on their property twice a year. If you want to list your house for sale in Corpus Christi four months before when the taxes are due, you will need to pay the prorated amount for the 2 months you will be living in that house.

HOA Fees

Just like property taxes, if your community has a Home Owner’s Association or HOA, your dues will be charged monthly, quarterly, or once a year. If it is quarterly or once a year, you will have to include prorated dues in the closing costs. This way, the buyer is not stuck for paying for the fees for months before they owned the house.

Escrow Fees

Escrow fees are beneficial for the buyers as well as the sellers. When you use escrow accounts for holding your money, you can be sure that the buyer will not just take away your money and then back out of the home sale. Most sellers cover 50% of the escrow fees charged as both the buyer as well as the seller benefit from using this account.

Credits towards the Closing Costs

There are certain problems that sellers may face when selling their property through traditional methods. However, when you sell your house in an area where the property competition is low, you will have to take additional steps and efforts to sell your house successfully. This may mean that you will have to offer some extra money to your buyer to cover the portion of closing costs. If this is a part of your home sale agreement, you need to pay the amount at the closing.

Home Improvement Costs

Another great way to attract the buyer to your property and generate greater interest in the sale is when you offer to pay for the repairs or renovations needed to make your property more attractive. Some of the home improvements may include

Adding a fresh coat of paint to your walls. It is recommended by experts to opt for neutral tones as they make your space seem big, bright.

Checking our HVAC systems and repair them if needed.

Improve the landscape of your home.

The more our house will appeal to the buyers, the more these costs will be worth it. Otherwise, you will have to keep lowering the price of your house over and over for attracting buyers.

The bottom line

Closing costs can be very substantial and can take up thousands of dollars out of your profits from your home sale. That is one reason why sellers prefer hiring flat-fee agents or sell their houses for cash.

Real estate agents buy a house in Corpus Christi TX for cash so you do not have to bear on the hefty closing costs fees as a seller.

To know more about their services on how they can help sellers keep the closing costs down, contact them today!